AUD/USD Price to Gather More Selling Below 0.7350

• The AUD/USD pair could drop deeper if it stays under the median line (ml).
• Registering a valid breakdown below the 61.8% retracement level may signal a potential reversal.
• Its failure to stay above the upper median line (UML) signaled a corrective phase.

The AUD/USD price is trading in the red at 0.7368. The bias remains bearish as the Dollar Index maintains a bullish bias in the short term. DXY’s further growth could force the USD to dominate the currency market.

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As you already know, the price is at a corrective phase. It has ignored strong downside obstacles, so a further drop is in the cards. The Federal Reserve is expected to continue to hike rates in the upcoming monetary policy meetings. That’s why the US Dollar remains strongly bullish.

On Friday, the US economic data came in better than expected. The Dollar Index could resume its growth anytime. Industrial Production rose by 0.9%, beating 0.4% expected. Capacity Utilization Rate was reported at 78.3% versus 77.8% forecasts, while the Empire State Manufacturing Index came in at 24.6 points above 0.9 points forecasted.

Today, the Australian banks are closed in observance of Easter Monday. Still, I believe that the Chinese data impacted the AUD/USD pair. The GDP rose by 4.8% versus 4.2% expected, the Unemployment Rate jumped from 5.5% to 5.8% above 5.5% estimates, while the Retail Sales registered a 3.5% drop compared to 3.0% forecasts. In addition, Industrial Production and the Fixed Asset Investment came in better than expected.

AUD/USD price technical analysis: Corrective phase

As you can see on the 4-hour chart, the price returned to retest the descending pitchfork’s median line (ml), which is seen as a dynamic resistance (support turned into resistance). The price found temporary support on the 61.8% (0.7354) retracement level.

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Breaking below this level could open the door for a larger drop. As long as it stays under the median line (ml), the AUD/USD pair could approach and reach new lows. A valid breakdown below 61.8% could activate a downside reversal.

Technically, the price failed to stabilize above the ascending pitchfork’s upper median line (UML), signaling that the upward movement could be over.

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